Consumer fraud takes many forms. One such form is counterfeiting spirits; in particular, fine wines, rare cognac, and whiskey. Counterfeited spirits are very difficult to detect and many consumers end up paying upwards of $500 per bottle for cheap imitations. It is relatively easy for a counterfeiter to acquire a bottle of fine wine or rare cognac, perhaps legitimately purchased, consume the contents, then refill the same bottle with a cheaper drink, cork it and sell it to an unsuspecting consumer. Some spirits are diluted with water or blended with wood alcohol.
In the fine wine secondary market, a potential buyer will examine the bottle and label to determine authenticity. Therein lies the problem, for the bottle and label could very well be authentic, yet the contents may be a cheap substitute. The ease of counterfeiting spirits, combined with the difficulty of authenticating the pedigree of the spirits, has contributed to a growing problem in the wine industry. Consider this pronouncement from www.wine-searcher.com/fakes.lml: “Some experts estimate that as much as 5% of the fine wine secondary market involves counterfeit wines. Pointers to the extent of the problem are that the volume of 1947 first growths sold in the last few years has exceeded that whole year's production.”
In many cases, the seller of counterfeit spirits portrays a person who has inherited a rare bottle of wine or spirit, and just wants to sell it for a fair price. Even reputed experts are being burned by these counterfeiters, leading to a growing concern over the sheer numbers involved. Consider this article written in 1998: “A Taste of Deception, an exclusive look at counterfeit wine—a multimillion-dollar business,” by James Suckling, May 31, 1998, a portion of which states: “For years, producers, merchants and collectors have been whispering about the growing number of counterfeits in tastings, auctions, restaurants and shops worldwide. Anyone who seriously trades in the best Bordeaux and Burgundies has stories about phony bottles. They have all been burned on occasion. Today, some believe that wine counterfeiting could be an internationally organized, multimillion-dollar crime. The FBI and New Scotland Yard have been investigating a number of fine wine merchants on both sides of the Atlantic in regard to the sales of bogus bottles, particularly cases of '82 Pètrus.
‘The genuine bottles are awash in fakes,’ said Serena Sutcliffe, head of the wine department of Sotheby's auction house. ‘For example, there are loads of '47s being drunk that are fake . . . . I am convinced that we are talking about big, big figures when it comes to counterfeited wines each year. We are talking about millions and millions of dollars over the last few years.’”
The wine industry has taken note. Some attempts to fight this fraud include: placing serial numbers on each bottle; requiring restaurants and bars to destroy bottles and labels before discarding; and placing radio frequency identification (RFID) tags in the cork. None of these measures have proven effective. Checking the serial numbers on bottles for a duplicate sale requires access to an up-to-date database and this is rarely possible. RFID tags may be easily replicated or cloned and they also require interaction with an up-to-date database. Restaurant and bar workers are often too busy to take on the additional tasks of properly destroying bottles and labels.
There is a need for a system and method to easily validate the authenticity of consumer products such as spirits.